Cultures and Organizations

							Cultures and Organizations


 Pyramids, Machines, Markets and
            Families
True or False? (VOTE)
1.   Hofstede offers a formula for developing
     successful managers in any culture
     across a globalized economy.
2.   Management theories reflect the cultures of
     the scholars who create them, NOT
     universal principles.
3.   Accounting systems are RITUALS for
     reducing uncertainty and assigning definite
     meaning to financial circumstances.
Answers
1.   FALSE. “[T]here is no single formula for
     developing successful managers that can
     be used in all cultures” (274).
2.   TRUE. “Theories, models, and practices are
     basically culture-specific; they may apply
     across borders, but this should always be
     proven.” (276) (All of ch. 7 develops this
     idea at various levels.)
3.   TRUE. “From a cultural point of view,
     accounting systems in organizations are
     best understood as uncertainty-reducing
     rituals, fulfilling a cultural need for certainty,
     simplicity, and truth in a confusing world.
#3 – Very counterintuitive!
 Q: Accounting deals with “hard” data, “dollars
    and cents.” How can it be a “soft,” cultural
    phenomenon?
   A: It’s the “language” of business = symbols
    (stuff of culture)
   $ Money $ – no intrinsic meaning/value;
    rather, value by convention (agreement)
   U.S. “Generally Accepted Accounting
    Principles” (GAAP) = rituals of accounting
   Religious? Accountants = “priests” of
    business
Accounting & Cult’l Dimensions
 Q: In strongly uncertainty-avoidant cultures?
 A: Detailed, “theory-based” procedures
   France, Germany
 Weakly avoidant: More ad hoc, pragmatic
 Q: How does Hofstede interpret Enron? (259)
 A: U.S. shift toward larger PD
   Shrinking middle class, rich growing richer and
     having disproportionate legal/political clout
   Larger PD → Figures twisted to justify decisions
     and desired image of power holders
Power of “soft” communication
 E. T. Hall: “Culture is communication and
  communication is culture.”
 Metaphor:
      Communication = river
      Culture = channel, sediment of communication,
       residue of joint meaning-making
 Culture = social reality – “hard” reality in
  practice & experience
 “Social construction of reality” (Berger &
  Luckman) – human reality is always socially
  mediated, interpreted, and structured
Another “hard” reality turned soft

 Organizational STRUCTURE
   “Nationality Defines Organizational
    Rationality” (275)
   Different cultures favor different implicit
    structural models (242)
 Hofstede combines two scholars’ work:
   Owen  Stevens’ (1970) study of MBA
    students from Britain, France, Germany
   Henry Mintzberg’s organizational fives
Combining Hofstede’s Dimensions

 Both Stevens’s & Mintzberg’s models involve
  2 issues in org. structure (per Aston studies)
      Concentration of authority
      Structuring of activities
 Q: Corresponding Hofstede dimensions?
 A: Power Distance
   Uncertainty Avoidance
 Hofstede overlays Stevens’s & Mintzberg’s
  typologies on a 4-cell matrix crossing these 2
  dimensions (see p. 243 & 255) . . .
Implicit Models of Organization
Who has the power to decide? & What rules will be followed?

VILLAGE MARKET (Stevens)                               FAMILY
OR Adhocracy (Mintzberg)                    OR Simple structure
Small Power Distance                 Large Power Distance
Weak Uncertainty avoidance          Weak Uncert. Avoidance

WELL-OILED MACHINE                  PYRAMID OF PEOPLE
OR Professional Bureaucracy               OR Full Bureaucracy
Small Power Distance                  Large Power Distance
Strong Uncertainty                       Strong Uncertainty
  Avoidance                                      Avoidance
Mintzberg’s Organizational
        Divisions
Mintzberg and Organizations
 Minzberg’s Model of Organizational Structure
  - 3 aspects (252-53):
   5 divisions/parts every organization has
   5 possible mechanisms for coordinating activities
   5 possible configurations of organizations

 Q: Which aspect relates to Power Distance?
 A: Configuration
 Q: Which aspect reflects UA?
 A: Coordinating mechanism
Group Work on National Culture
& Organizational Structure
 HO: Figures for Mintzberg’s 5 parts & configur’ns
 5 groups – Britain, Germany, China, France, U.S.
 Locate these nations in Fig. 7.1 (p. 243),
  then compare with Fig. 7.2. (p. 255)
 How does your nation’s relative location on the
  UA x PD graph influence its preferred configuration?
       Which figure does it correspond to on the handout? Use the
        figure to help explain the nature of the configuration.
 How does its relative location on these dimensions
  explain its preferred coordinating mechanism?
 Think of a hypothetical scenario in which your
  nation’s preferred configuration and coordinating
  mechanism play out within an organization.
Different Mental Models
 In Stevens’s metaphoric terms . . .
 French “Pyramid of People”
    Large PDI & Strong UA
    Advocate measures to concentrate authority and
     structure activities
 German “Well-Oiled Machine”
   Small PDI & Strong UA
   Advocate structuring activities without
    concentrating authority
Different Mental Models
 British “Village Market”
   Small  PDI and weak UA
   Neither concentrating authority nor
    structuring activities
 Chinese “Family”
   Large  PDI and weak UA
   Concentration of authority without
    structuring the task
Caveat: Some organizations are similar
across cultures (nations)

 Banks everywhere tend to function like
  Pyramids
 Post-Offices like Machines (professional
  bureaucracies)
 Advertising Agencies like Markets
 Orchestras like an autocratically led family
Implications for Success?
 Organizations            Organizations
  headquartered in          headquartered in
  small PD cultures         large PD cultures
  opening new offices       opening new offices
  in large PD cultures.     in small PD cultures.
Classical Organizational Theories
and Hofstede’s models
   FAYOL’s (French) concept of division of labor
    plays out in the pyramid of people model
   WEBER’s (German) concept of organizational
    operation that places real authority in the rules
    = well oiled machine model.
   TAYLOR’s (American) concept that the situation
    should determine the structure is organization by
    the village market model.
   SUN YAT SEN’s (Chinese) adaptation of Western-
    style democracy to include a strongly controlling
    leader and supervising agencies reflects a deep-
    rooted tradition of the family model.